Privatizing Public Transportation: An analysis of the success of railway
reform in Japan
A research project submitted to the Urban Studies and Planning Program
University of California, San Diego
Kenton Trinh
USP 187
ketrinh@ucsd.edu
February 8th, 2011
Abstract
When it comes to public transportation in the United States (U.S.), the role of the
government has been harmful more so than it has been helpful. Utilizing a case study of
private railways in Japan, this research advocates the privatization of urban transit
systems by presenting evidence that private ownership could help boost transit ridership
and increase efficiency. A second purpose of the study was to determine whether or not
successful privatization efforts in Japan are applicable to public transportation in the U.S.
The research used historical and content analysis of archival records and past literature as
well as intensive interviews with those who has had experience with Japanese railways.
The study indicated that the success of privatized railways in Japan is engrained in its
history as well as a result of decreased government intervention and better management
strategies.
Key Terms: privatization, public transportation, railway reform, Japan
Introduction
Understanding The Need for Privatization
Government ownership of public transportation has not achieved success in urban
settings around the world. In the United States, the transit industry has reached an alltime low now that declines in tax revenue have forced major cuts in the urban transit
services. There are other factors that contribute to this inefficiency such as deteriorating
rail infrastructure and employee pensions and health care plans, which continue to put a
growing burden on taxpayers (O’Toole 1). These results can be attributed to a lack of
urgency by the government in preventing the aforementioned problems. Studies have
Privatizing Public Transit 1
shown that private ownership is more efficient than public when it comes to owning and
managing urban transit systems. The main goal of the study was to provide an assessment
of the history and transit ownership-management structures that led to success of
privatization in Japan while exploring the concept of applying it to urban transit systems
in the United States.
I examined two major railway types in Japan and the different ways it is owned
and managed: private Japan Railway (JR) companies and public/third sector companies.
In order to understand transit statistics relevant to the research project, knowledge of the
different types of railways in Japan is necessary. The project focuses on the history of JR
companies, which was previously known as Japan National Railways (JNR) prior to the
1980’s. As the rest of the world experienced changes to their public transportation
systems due to car ownership, JNR tried everything they could to preserve their railways.
Instead of allowing it to run deficits, JNR was divided and privatized into six railway
different entities, the JR companies (Imashiro 51).
In looking at the JR, I analyzed railway statistics and deemed revenue and
ridership as the measuring sticks of success. I also compared the statistics between the
two major railway types in Japan as well as with Amtrak in the U.S. The study was
framed around this criterion and revealed how railways in Japan define success and how
they continue to operationalize this. The next step was to analyze the ways in which the
railways are managed today and how they contribute to higher passenger traffic and
increasing revenue. Through an assessment of railways in Japan, I found that
privatization is successful because of the organizational structure that features less
government intervention and better business management strategies. In Japan,
privatization works because of reduced subsidies, revised business strategies that include
development around rail stations and restriction of capital expenditures to internally
generated funds, and demographic trends that show the clearing out of the countryside
and regional cities. More importantly, Japan’s history relating to the development of their
rail networks is unique and unlike that of the United States.
Literature Review
The Case Against Government Influences
As the financial problems of public transit continue to grow in the U.S.,
researchers and policy makers are beginning to question its effectiveness in urban areas.
The current recession has reduced tax support for transit, making it hard for transit
service to be maintained at optimal levels. In addition, the public transit system is
believed to be moving backwards. This has led to a reconsideration of the strategy of
transferring public transportation services over to the private sector. Cities that are
looking to revitalize their public transportation opt to look at privatization efforts put
forth by Japan on their transportation system. According to Fumitoshi Mizutani and Suji
Uranishi, the preferred type of transportation in Japan is still the automobile, but its Japan
Railway experiences heavy usage as well (3).
Privatization of transportation systems has shown success in some cases and
disastrous results in others. Many researchers argue that a huge reason for the failure of
government-regulated public transit results from subsidies given to them. When the
government takes over and fully controls a previously privatized transit company, they
provide financial assistance that raises the cost of public transit through higher wages and
Privatizing Public Transit 3
the threat of unionization (Scholl 145). Congress requires that union support be gained
before any transit agencies are eligible to receive any form of federal subsidy. Karlaftis
and McCarthy argue that rising costs created by subsidies leads to decline in productivity
lack of innovation and initiative, and failure to manage finances properly. Subsidies
justify flat and low rates for public transit use whereas “privatization better rationalizes
transit activities and generates efficiency gains in urban transit provision” (Karlaftis and
McCarthy 32).
Privatization, along with the removal of subsidies, is believed to help alleviate
inefficient and debt-ridden public transit systems. Karlaftis and McCarthy (1999)
examine the effects of privatization on public transit costs. Like Scholl, they find that the
lower costs of transit in comparison to the public sector are made possible through lower
wages. Private firms work under the motivation of profit and seem to be offering benefits
that purely public transit lack such as “labor cost differentials, diseconomies of scale,
increased flexibility of service provision and work rules, and increased competition”
(Scholl 145). Drivers for private firms are generally paid substantially less than public
transit operators and receive less benefits. However, public transit service is more labor
intensive and have less flexible work regulations. According to Karlaftis and McCarthy,
privately owned and operated systems are able to gain more output per dollar and higher
amounts of revenue as well as better financial management compared to the public sector
and a lot of it has to do with more efficient use of labor (31). For example, privately
owned companies encourage workers to work on maintenance and other activities during
off-peak periods.
In a comparative study that looks at public and private sector costs of urban transit
systems in the Province of Ontario, Canada, Harry Kitchen (1992) provides statistics that
reveal the differences in per-unit operating costs of the two transit services. Kitchen
rejects quality of service, state of technology, and price of inputs (price of labor,
equipment, and energy) as the reasons behind the differences in per-unit operating costs.
Instead, he finds operational efficiency to be the main component in the variation of
operating costs and attributes it to “lower hourly wage rates for transit operators (drivers)
and greater vehicle use in privately contracted systems” (Kitchen 122). After evaluating
the different aspects of operational efficiency, Kitchen found that the provision of urban
transit systems by a privately contracted firm was much less expensive than provision by
a public body (116).
Publicly owned and operated transit systems are susceptible to economic
downturns. As tax support for transit gets reduced, fares either get raised or services get
cut. For example, the Great Recession in the United States caused the Chicago Transit
Authority to lay off “1,100 workers, or about 10 percent of its work force” (O’Toole 7).
Eventually, these types of cutbacks will reduce profit and level of ridership.
Motivated By Profit
Private transit firms have the motivation in the form of market competition to
increase productivity, keep transit equipment effective, and avoid the construction of
unnecessary and expensive infrastructure. Opponents of public transit privatization argue
that cities are opting to build expensive rails over buses that offer service at a much
cheaper price. Several things are thought to come with the privatization of transit. Some
Privatizing Public Transit 5
examples include improved transit service in the inner cities and the replacement of these
high-cost railways with low-cost bus services (O’Toole 20). Most states are serviced by
public transit monopolies, though there are private companies where private transit is
allowed. Jitneys and other types of shared transit service are prevalent in cities such as
Puerto Rico, Chile, Brazil, Argentina, New Jersey, New York, Miami, San Francisco and
Los Angeles. Nemer and Teal (1989) outline the impact of the Los Angeles jitney
experience and its quality of service through surveys with passengers. Jitneys, privately
owned and managed vehicles that operated “on relatively fixed routes with unspecified
user-defined stops and unscheduled headways,” showed considerable success in Los
Angeles during the 1980s. Jitney operations eventually fell apart due to competition with
the Southern California Rapid Transit District, but demonstrated certain qualities that
could prove beneficial under better circumstance. Currently, Los Angeles is connected to
San Francisco and Las Vegas through intercity bus services referred to as “Chinatown
buses.” Though it cannot be considered urban transit, it does provide a private
transportation success story whose lessons are useful for public transit” (O’Toole 19).
Different Strategies of Privatization
Complete shift of public transportation into the private sector is not the only
strategy of privatization. Contracting appears to be most common form of privatization,
at least in the United States. Scholl (2006) examines the contracting of public transit that
allows for government-owned systems to be operated by public firms, “With contracting
of public transit, the public agency coordinates schedules, routes, and fares to overcome
the problem of multiple providers, while the private operator owns and maintains
vehicles and hires drivers” (144). Despite its popularity, Babitsky and Perry (1986) find
that, in terms of efficiency, there was little to no difference found in contract managed
systems versus publicly managed ones (63). Although Scholl does see costs savings
under these conditions, it is at the cost of service quality and safety, “Furthermore, lower
wages and higher turnover rates associated with contracting may be in turn related to the
observed increase in accidents and lower quality transit service” (156). Therefore, it may
be important to review case studies of both forms of public transit regulation to determine
what makes them more appealing than other systems, especially given its success in the
1980s (Babitsky and Perry 64).
Lack of Consensus Regarding Privatization
Not all literature on privatization is in support of it. Todd Litman (2011) argues
that privatization tends to reduce the quality and cost of services and does not have the
benefits of publically transit owned systems. According to Litman, privatization can
cause declines in service because private firms only respond to times and locations with
high demand. There will be an inconsistency in fares (lower on popular routes, higher
elsewhere) that will turn riders to automobile travel. Instead of purely privatized, selffinancing public transit, Litman suggests government owned bus lanes and stations with
operation conducted by private companies. He concludes that transport infrastructure
privatization (roads, rail and urban transit) may be feasible in other urban settings, but has
problems and costs that are understated in literature advocating privatization in the
United States.
Privatizing Public Transit 7
Literature on the privatization lacks a clear consensus on the degree of its success.
Japan’s privatized forms of urban transit, however, have shown to be effective. The case
study on Japan Railway provides further evidence that privatization of public transit can
work under certain circumstances. Current literature on the topic fails to analyze the
different settings required in order for privatization to work. These conditions and
developments have been analyzed in detail in order to improve the struggling public
transportation systems in the United States. Through a thorough investigation of railways
in Japan, I will detail the organizational structures that allows for higher transit ridership
and improved efficiency compared to public transit. Furthermore, my research will
Research Strategy
Multiple Approaches
The case study portion of the research project was done on railways in Japan,
particular the JR companies. The JR companies were chosen because they underwent a
successful shift from government-owned to privatized and unsubsidized entities. In
Japan, the primary means of moving from one place to another is through rail
transportation. Its history offers a strong contrast from other countries in the sense that it
did not completely follow the conventional trends surrounding transportation. It provided
detail on their process model and how their plan of privatization manifested itself over
the years. It also revealed lessons about what is missing and can be improved upon.
These reasons make Japan the optimal candidate for studying privatization. The research
utilized researched based on both qualitative and quantitative data. It relies mainly on two
different types of methodologies which include: (1) a case study done through content
analysis and (2) interviews from professional and ethnographic standpoints.
Content analysis of the privatization of public transportation in Japan was
gathered via the library and Internet. Specifically, content analysis was done on print
media regarding privatization in Japan. Sources were mainly gathered at Geisel Library,
but ventures to organizations outside of the UCSD campus, such as the San Diego Public
Library, were made as well. The data came in a variety of forms, including books,
reports, essays, debates, editorials and newspaper articles. The history of Japan was
mainly uncovered through newspaper articles and academic journals in electronic form.
This was the optimal method because it made drawing certain themes about the
development of its railways feasible and convenient. My research also includes the
secondary data analysis of transit statistics gathered from reports on official websites. I
found the use of online sources much more flexible yet specific to my needs, which is
perfect given the time constraints of the research project. This portion of the data
collection focused on the early events regarding the railways and the dynamics that paved
the way for its privatization. It relied on information about previous and current political
influences, management tactics, and transport markets to draw inferences about the
change in ownership.
The findings gathered from content analysis of printed media were
straightforward and sufficient, especially when combined with the use of interviews.
There were two types of interviews that were conducted for the research. The first
interview was done with Stephen Smith, a journalist who specializes in the history of
urbanism. The interview with Smith, who has blogged for outlets such as Forbes.com and
Privatizing Public Transit 9
The Atlantic Cities, allowed for firsthand knowledge about the research. It was important
to understand opinions and values about privatization on a professional level. This
interview consisted of five to ten questions and was conducted through electronic
messages. The second interview was conducted with Keita Yamagata, a Japanese student
at UCSD who frequently visits Japan. His answers provide insight on the effects of
privatization of urban transit systems from an ethnographic perspective. This interview
was also had five to ten questions, but was conducted in-person. Both interviews were
semi-structured, meaning they were focused to a certain degree but had room for
conversational exchanges in order to clear up any miscommunications. It was helpful to
obtain different perspectives on specific issues. I sought not only for just answers, but
also the reasons behind those answers.
Limits to the Research
Despite the level of detail that has gone into the research of the privatization of
public transit in Japan, there are limitations that hinder the final product. The content
analysis portion of the research is definitely limited by the amount of material available,
which may cause certain aspects to be left out. Other researchers may disagree with the
way that I have interpreted the information, leading to conflicting opinions and findings.
In addition, using relational analysis to connect privatization in Japan to other urban
settings could be prone to error. Secondary data analysis regarding transit statistics has
limitations as well. Using previously collected data can lessen the validity of the research
because the variables may differ from what I am looking for. Furthermore, some of the
statistics gathered for the JR companies are in Japanese and required the help of a
translator. Converting revenue from yen to U.S. dollars proved to be most problematic.
Although interviews with a professional with knowledge of Japan Railway have
been conducted, there is no possibility of conducting on-site surveys and interviews with
a variety of people who actually utilize the railways on a daily basis. The ethnographic
interview makes up for the lack of immediacy, but the research is still somewhat limited.
In a semi-structured interview, interviewees are open to ask me to clarify certain
questions, but I found that this sometimes got us off-topic. While I appreciate the desire
to provide a clear answer, I found that this sometimes interrupted my lingering thoughts.
Additionally, the research does not actually apply the strategies gained from privatized
transit in Japan onto other systems of transit. I will do my best to theorize the
possibilities, but the application of these strategies may not display the same success.
Analysis and Findings
In this section, I will provide the findings from my studies and organized it into
three areas. First, I will examine the history of the railways and the related dynamics that
accompanied its privatization in the past. This suggests that perhaps Japan’s processes
were distinctive to its history and cannot be replicated elsewhere. Next, I will discuss the
statistical details that support the effectiveness of private railways and suggest that urban
transit systems should change hands in ownership, from public to private, in order to
increase productivity and profitability. Finally, I will analyze several management
strategies under privatized railways and propose ways that they contribute to its success.
Privatizing Public Transit 1
1
A Brief History
In assessing the effort of privatization, it is important to understand the history of
JNR and JR companies as well as the history of Japan itself. For the purposes of the
project, we began our assessment of the railways starting in the early- to mid-twentieth
century. The emergence of JNR came on June 1st, 1949, soon after the end of World War
II (WWII). In our interview with Smith, he claimed that the destruction of the country
during the war was actually a blessing because it did not allow them “the luxury of
building inefficient and wasteful highways and subsidizing suburbs.” Instead, the
Japanese renovated their government railways after the war, as the economy started to
pick up again years later. The railways eventually became the main source of
transportation in Japan in 1950, accounting for 92% of passenger transport (Imashiro 51).
In the 1960s, the Japanese continued investing heavily in the modernization of their
existing trunk lines (Wakuda 60).
Despite the immediate success of the railways following the war, the JNR began
to face growing problems. Population grew from 99 million in 1965 to 121 million in
1985, leading to congestion on railways (Wakuda 60). The second major event that led to
the privatization of JNR was the rise of private automobile ownership, which increased as
the population grew. Vehicle ownership, along with the emergence of private bus
services and increasing income levels, meant that railways were no longer monopolizing
the transportation market in Japan. As a result, JNR attempted to make up for their losses
by increasing fares, reducing staff, and asking for more government subsidies (Imashiro
51). The government failed to support the railways because of decreasing tax revenues;
however, they continued to invest in it due to political pressures. In 1987, the government
railways were eventually divided and privatized into six railway companies with the JR
East, JR Central and JR West being the main profitable entities.
Critical Events Prior to the Privatization of JNR
Date
Event
End of World War II
1945
Government railways reestablished as Japanese National Railways
1949
Increasing popularity of the domestic automobile
1970s
JNR divided and privatized as Japan Railways Group
1987
Figure 1: Critical Events Prior to the Privatization of JNR
Source: Japan Railway & Transport Review
Our findings demonstrate that certain aspects of history have allowed for natural
progression toward privatization. For instance, urban cities that are suffering from the
same inefficiency and unprofitability in terms of railways today are met with different
circumstances. The problems that JNR faced in the past mirror those that the U.S. is
currently confronted with. However, highways and suburbs are an integral part of their
infrastructure and have become part of the culture there. In Japan, lack of parking space
and traffic congestion acted as a deterrent for those who preferred to travel by road. In
American, almost every household is equipped with a car whereas this is nearly
impossible in Japan because of the shortage of land. People live in apartment complexes
and have few parking spaces. Add on the high cost of purchasing and maintaining a car
and it is easy to see why it makes sense for the Japanese to just use the railway system
(Smith). For Americans, it is most convenient to travel with automobiles. Fortunately, the
Japanese were able to identify automobile’s rise in popularity and acted accordingly to
stimulate their public transit system.
Railway as a mode of transportation has existed in Japan for centuries. They have
managed to develop a certain etiquette that guides them in getting on and off the trains in
Privatizing Public Transit 1
3
an efficient manner (Yuko 5). According to Yamagata, culture, as it has developed
through history, is important in thinking about success of privatization for the U.S. He
started that “Japanese accept transit more as a result of Japanese culture.” Public transit is
part of their upbringing and he sees no big inconveniences with using public transit (other
than the fact that it does not run past 12:30AM). He also attributes the popular use of
public transit to the patience that is inherent to his people.
The analysis of these events is where the research shows that there is a correlation
between the history of the railways and its success as privately owned entities. We
suggest that privatization of urban transit systems will not hold the same success across
eras and regions. If anything, the findings suggest that by exploring how privatization
was done in the past, cities can consider new ways of envisioning how it can be done in
the future.
Statistical Analysis
The first comparison was made between two major railway types in Japan in
order to highlight this success: private JR companies and public/third-sector companies.
The research has determined that success is based on two factors: profitability and
productivity. Simply put, can privatized public transit get people where they need to go
and is there enough revenue generated to sustain its operations? In terms of productivity,
a critical component used to measure it would be the amount of land the railway covers
per kilometer.
Route Length of Japan Rail Network, March 1993 (kilometers)
JRs
2,628.3
PRs
218.6
Total
2,846.9
Density (Area)
34.1
Hokkaido
Island
181.9
1,037.7
55.2
Shikoku Island 855.8
2,100.7
541.6
2,642.3
62.7
Kyushu Island
7,502.0
2,979.6
10,481.6
80.7
East
1,994.7
1,441.4
3,436.1
117.3
Center
5,059.1
1,860.2
6,919.3
96.4
West
20,140.6
7,223.3
27,363.9
72.9
Total
Figure 2: Route Length of Japan Rail Network, March 1993
Source: Metropolitan Traffic Annual, Railroad Almanac, and Railroad Traffic Statistics
Annual
*PRs are publically owned railways
What is clearly noticeable is that the JRs routes run more than double the distance
of the public railways, with 20,140.6 kilometers in length to 7,223.3 kilometers. When
you look at these statistics, it is clear that privately owned railways are much more
efficient in terms of its accessibility. It tells us that the JR companies could perhaps reach
areas that the public companies do not.
Next, we compared statistics of the JRs to those of Amtrak in the U.S. The
Ministry of Land, Infrastructure, Transport and Tourism reports that, in 2000, the JR
companies accounted for roughly 149,561 in passenger-miles (million) and continued to
increase each year. In the same year, statistics from the National Association of Railroad
Passengers show that the U.S. Amtrak only accrued 5498 in passenger-miles (million). A
critical opponent of defining success in terms of public transportation is the amount of
passengers that it carries per mile. Despite congestion, Yamagata described the appeal of
railways in a positive. He feels that he can get anywhere he needs to go with ease and on
time. That is because the trains are almost always on time and a couple of minutes late at
worst. During rush hour, he admits that congestion can be irritating, but it is something
Privatizing Public Transit 1
5
that you get used to. If you feel that a train is too packed, another one will come within
five minutes. Punctuality is an important factor when it comes to productivity. For the
JRs, the delay percentage is around 10%. This is a trend that has been sustained for nearly
a century (Yuko 1). Conversely, in 1999, Amtrak recorded a 16.7% delay and has seen a
decline only in recent years. The ability to get riders to their destinations on time proved
true for private railways as well.
When it comes to profitability, there is a large discrepancy between revenue
statistics of the JRs versus Amtrak. Passenger revenue for the private JRs peaked at
¥59,920 (100 million yen) in 2005. That number translates to nearly $780 billion in U.S.
currency. In the same year, Amtrak was able to generate $1897 million in passenger
revenue. The lack of profitability of the Amtrak can be attributed to poor management
and inability to get riders where they need to go and on time.
Indeed, we see this trend of productivity and profitability for private railways in
Japan. The findings show that the private railways are the dominant mode of
transportation in Japan and serve more routes than publicly owned transit. In comparison
to railways in the U.S., the JRs show they have carried more passengers per mile and
continue to generate more revenue. However, we also want to draw attention to the ways
in which the JRs are managed to show the methods that contribute to its success.
Methods of Ownership
Privatization of urban transit systems bring upon many different strategies in
terms of management. There are many different reasons why Japanese trains are different
from the rest of the world, specifically the U.S. Amtrak. The ownership-management
techniques are responsibility its productivity, profitability, and punctuality: (1)
competition between railways, (2) lack of political intrusion, and (3) business diversity in
surrounding land use.
Competition between railways is important for many reasons. One of them is to
foster a sense of urgency in providing service that attracts ridership. This leads to better
service from railway operators and innovations in railway technology, which contrasts
largely with the transit innovation crisis going on in the U.S. Cities in the U.S. are taking
on projects that they are unable to pay for; this leads to more debt for the government,
something that eventually led to the downfall of JNR (O’Toole 12). Allowing private
businesses and developers pay for maintenance and construction as they compete with
other corporations are the perfect way to stimulate the declining transit system.
Privatization also features lessened political intrusions, which proved to be
beneficial to everyone, including the government itself. In the U.S., the Amtrak generates
most of their funds from taxes and not transit fees. This results in less feedback from
riders. Also, as we can see in both cases, tax crises during the recession prove that
publicly owned transit systems are not financially sustainable. This contrasted sharply
with Smith’s opinion of the government’s role in the operation of the JRs, who believed
that there are remaining political intrusions that hinder its cause. He feels that price
controls and other interventions are making it hard for private systems to expand, which
results in crowding. He suggests raising their price by 50% during peak hours and using
the money to buy European technology. This will allow the Japanese to expand their
systems and alleviate much of the crowding (Smith). One management implication is
clear. While the findings show that the less political intrusions are correlated with better
efficiency in railways, there are some that remain.
Privatizing Public Transit 1
7
The amount of literature making their case against subsidies is justified given the
JNR’s growing debt in the 1980’s. Over a period of four years in the 1980’s, the JNR
received more than $27.8 billion in subsidies (Kopicki and Thompson 79). It is useful to
set limits to how much subsidies are given during privatization. Not only will this be
beneficial to the JR companies, but the government will benefit as well. The JRs as
taxpayers contribute a net positive flow to the government (Figure 3).
Fiscal Effects of JNR Privatization
Taxes and
Contributions
Subsidies
Balance
1985
435
5,455
-5,021
1986
455
3,433
-2,977
1987
2,006
1,761
245
1988
2,234
1,918
315
1989
2,092
5,755
-3,664
1990
2,722
1,428
1,294
1991
4,039
984
3,055
Figure 3: Fiscal Effects of JNR Privatization
Source: Metropolitan Traffic Annual, Railroad Almanac, and Railroad Traffic Statistics
Annual
Smith also calls for more development around stations, but the truth of the matter
is that there is already enough to generate success for the railways. He thinks that they
already do allow a lot of density, but more is always better in this case, especially near
the centers of Tokyo and Osaka. The demand is enormous there despite the relatively
laissez-faire land use policy (Smith). For many years, the JR companies have engaged in
business diversification and community development along rail lines (Saito 3). What the
developers believe is that any deficits from the railway operations will be covered by
revenue from surrounding businesses. In countries such as the U.S., there simply is not
enough freedom, in terms of government regulation, to use business development as a
way to attract riders.
Conclusion
By drawing on several types of existing literature and interviews with specific
individuals, we learned about the management techniques that made privatization work in
Japan. For instance, the ability for privately owned railways to act as developers and
build around rail stations contributed to its attractiveness as a mode of transportation. We
backed up the effectiveness of Japan’s privatization efforts with statistics that compared
the JRs with public railways in Japan and Amtrak in the U.S. The general theme was that
the JRs covered the most route length in Japan and outperformed Amtrak in terms of
passengers carried per mile and revenue generated. However, what became clear while
using historical methods for the research was how the different events helped pave the
way the privatization of Japan’s urban transit system. It was helpful in showing how
phenomena such as existing infrastructure and popularizing trends wound up making
Japan a unique case study for the research topic. The research revealed that its
privatization was a distinct occurrence and likely cannot be duplicated in other urban
areas.
In recent years, public ownership of transit in the U.S. has led to declines in
productivity and deficits in revenue. As a historical/comparative study of private railways
in Japan, the findings from this research project have analyzed the major themes within
privatization that make it work. It sought to look for patterns in the history of different
Privatizing Public Transit 1
9
cultures. Even though we discovered that the JRs are more productivity and profitable,
we suggest that the U.S. already has infrastructure that support the automobile, which has
become engrained as a part of their history and culture. Yet, aside from railways, there
are other urban transit entities that can be privatized, such as buses. We suggest that U.S.
policymakers and urban planners continue to investigate the process of privatization so
that a happy medium can be reached between public transit and the automobile under it.
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